Did Babies “R” Us participate in a wide-ranging price-fixing scheme to rip of parents?
Was there widespread price-fixing conspiracy that protected the profits of Babies “R” Us, the country’s dominant big-box baby retailer? According to a federal judge, it appears that could be the case. On July 15, the U.S. District Court in Philadelphia granted class-action status to a complaint that Babies “R” Us coerced manufacturers of high-end strollers, car seats, high chairs, strap carriers and breast pumps into preventing Internet retailers from discounting their products. The dirty deal, according to the suit, was simple. From 2001 to 2006, Babies “R” Us told companies like Medela that they had to enforce resale-price maintenance — i.e., tell the Web retailers, who can more easily discount products since they avoid brick-and-mortar costs, to sell your products at X, or you’ll cut off the supply. If they resisted, Babies “R” Us threatened to cut off the manufacturers, according to the suit, and refuse to sell their products in Babies “R” Us stores. Since Babies “R” Us sold 30% to
Did Babies “R” Us Gouge Mommy and Daddy? On July 15, the U.S. District Court in Philadelphia granted class-action status to a complaint that Babies “R” Us coerced manufacturers of high-end strollers, car seats, high chairs, strap carriers and breast pumps into preventing Internet retailers from discounting their products. The dirty deal, according to the suit, was simple. Between 2001 and 2006, Babies “R” Us told companies like Medela that they had to enforce resale price maintenance — i.e., tell the Web retailers, who can more easily discount products since they avoid brick-and-mortar costs, to sell your products at X, or you’ll cut off the supply. If they resisted, Babies “R” Us threatened to cut off the manufacturers, according to the suit, and refuse to sell their products in Babies “R” Us stores. Sources: http://www.time.com/time/business/article/0,8599,1911832,00.
